Market MakeHer Podcast

22. Q&A: Can I Have Multiple Roth IRAs? Are There 401k Rollover to IRA Tax Implications?

Dec 13, 2023
This episode tackles intriguing questions about IRAs and 401(k)s, diving into the tax implications of rollovers. Listeners learn how to manage their employer 401(k) investments and discover they can control investment choices within those plans. The hosts also explore the possibility of having multiple IRAs while highlighting the importance of contribution limits. Tips on creating an effective investment strategy after a rollover are shared, ensuring you're set up to meet your financial goals.
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ADVICE

Do A Direct Rollover To Avoid Tax Triggers

  • When leaving an employer, roll your 401(k) directly into a rollover IRA to avoid tax issues and paperwork hassle.
  • Ask your plan provider to do a direct rollover so the 1099-R and 5498 match and taxes aren’t triggered.
ANECDOTE

A Smooth Personal Rollover Experience

  • Jess Inskip describes rolling over multiple 401(k)s and receiving matching 1099-R and 5498 forms that TurboTax handled automatically.
  • She reports the rollover was seamless and her broker walked her through the paperwork end-to-end.
ADVICE

Call Your Plan And Open The IRA First

  • Call your 401(k) plan administrator when you exit and open the rollover IRA before requesting the transfer.
  • Keep funds segregated and invest the cash promptly once the rollover hits your IRA.
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